Restructuring legislation

The challenge of a dismissal in cases of 'social hardship' is only possible in companies where at least 5 employees are employed constantly. If the works council has approved dismissals that qualify as socially unjustified it is not possible to appeal to the court (§105 (3), 2).

The obligation to respect the age pyramid does not create special protection or rights for individual employees but it is an important condition for companies wishing to maintain their entitlement to a reduction in social security contributions. The goal of this obligation is to prevent the targeting of specific age groups within the company in case of dismissals. In some cases employers would want to dismiss older employees in favour of younger ones, since they are more expensive because of their seniority years.

Art. 333 of the Labour Code establishes the so-called 'Prior protection' upon dismissal. The protection is preliminary because it precedes the dismissal. Its purpose is to make dismissal subject to prior authorisation of a state or trade union body, and only upon receipt of that authorisation the dismissal may be carried out. This permission is requested in writing by the employer and must be received in writing by the competent state or trade union body. If such an authorisation is not requested or when been requested, it has not been given before the dismissal, the dismissal made on that ground alone is unlawful.

In the selection of redundant employees, the employer, the works council and the public employment service pay due care to age, gender, level of education, job specification, termination period, duration of employment contract, disability status, number of family members they support, amount of severance pay required as well as alternative measures of employment and additional training for another position within the company. However, these are not exact rules. Article 127 of the Labor Law stipulates that an employer whose need for work could cease within a period of ninety days for at least twenty workers, of whom the employment contracts of at least five workers would end due to business-related dismissal, is obliged to do so in a timely manner and in the manner prescribed by the Labor Law. The employer should consult with the workers' council in order to reach an agreement on how to reduce the need for workers. At the same time, as redundant workers are counted also workers whose employment relationship will end due to business-related termination of the employment contract and an agreement between the employer and the workers at the employer's proposal. Therefore, in such a case, it is important to distinguish who made the proposal for the agreement - the employer in the process of resolving the redundancy, or the employee for some of his or her personal reasons that have no relation to the collective redundancy. That is why, in such circumstances, it should be stated in the agreement who proposed it, which is otherwise not necessary in any way. As mentioned, the agreement on the termination of the employment contract must be concluded in writing. Without a written form, there is no agreement, it is invalid, therefore void. So, unlike an employment contract, for which a written form is not necessary for its existence, it is necessary for a termination of the employment agreement. This is understandable because when concluding a contract, the very fact of working for an employer shows the agreement of the will of the employer and the employee, while the same situation does not exist in the termination of the employment contract. The absence of a written form could lead to numerous abuses and legal uncertainty, especially for the employee. The agreement must be in writing, signed by both contracting parties, the employer and the employee. Of course, the worker signs in person, although the possibility of having a proxy with a valid power of attorney sign for him or her is not excluded. If the employer is a legal entity, the agreement can be concluded on his behalf by a person who is authorized to do so by the statute, social contract, declaration of incorporation or other rules of the legal entity. This person can transfer this authorization by written power of attorney to another legally competent person. The employer - a natural person personally signs the agreement, and can transfer this authorization with a written power of attorney to authorize another legally capable person. Even after such a change, so that the employer is no longer obliged to create a program for dealing with redundant workers, this institute remained in compliance with Council Directive 98/59/EC of 20 July, 1998, on the harmonization of the legal regulations of the member states on the collective dismissal of redundant workers. Its meaning is focused on the participation of workers' representatives in the entire process of collective cancellation in all its stages and enabling the application of active employment measures to reduce or prevent the consequences of the cancellation of the employment contract. However, the procedure has been simplified for employers, because previous obligation was usually extremely complex and required a lot of time and causes many problems. At the same time the results in terms of actually solving workers' problems, such as employment elsewhere, were negligible.

The legislation is rarely activated in Cyprus, since the definition of collective dismissals requires the dismissal of at least 10 employees. However, during the economic and financial crisis, particularly in 2012 and 2013, an increased number of collective dismissals cases has been observed. The Labour Relations Department has reviewed more than 140 cases during these years. Both Trade unions and the Labour Relations Department share the assessment that the legislation is more likely to be applied in a satisfactory manner in companies where labour relations are governed by a collective agreement, i.e. where trade unions are present, demand and ensure that the legislation is respected.

No information available.

Some collective agreements may regulate further the order in dismissals, for example: * In selecting candidates for collective dismissals, employers should take into account length of service and family circumstances. * Preference in retention should be given to skilled personnel and those partly disabled due to work accidents.

After the 2015 reform, the labour code was again amended in 2017 to increase the flexibility provided to employers to apply selection criteria. With the 2015 reform, only companies with at least 50 employees and 10 redundant people over a 30-days period could limit the scope of selection criteria through collective agreement. With the 2017 reform, all companies benefit from this provision regardless of their workforce size and dismissal figures. Case law of the Supreme Court (Cour de cassation) – for collective dismissals of fewer than 10 employees – and the Council of State (Conseil d'Etat) – for collective dismissals of 10 employees and over – strictly controls that all the criteria are taken in consideration. An employer may not directly or indirectly exclude any of these criteria.

Following ECJ rulings from 2015 (Rivera and Balkaya-Kiesel), fixed-term workers, CEO and interns are also covered by the collective dismissal regulation.   Generally speaking, the implied social basis of the mechanism tends to protect more vulnerable workers. This may be in conflict with the aim of regaining economic viability through restructuring, a goal which may be shared by the works council in its endeavour to preserve jobs. Negotiations on restructuring are centred on a compromise between social and economic perspectives, and on designing the legal mechanisms by which the agreed outcome can be achieved.

By virtue of Law 4808/2021, there is a reversal of the burden of proof in favour of the employee. If a dispute occurs, due to an employee's dismissal on grounds of a requested or received leave, or flexible regulation, and/or exercised relevant rights, the employee needs to cite facts for being dismissed due to one of the prohibited reasons. In this case, the employer has the burden of proving that the dismissal is due to reasons other than the ones prohibited. In addition, by virtue of Law 4808/2021, a similar prohibition as that of not dismissing a pregnant woman, or a lactating mother, unless there is a great reason, is introduced for the working father, for six months after the birth, provided, also, that there is a great reason. The Law explicitly states that by no means a reduction of performance, due to the mother’s pregnancy or the family obligations, of the working parent can be considered as a great reason. There are many examples in the case law of redundancies being annulled because the employer did not take the social criteria into account, or did not inform the employees’ representatives in writing of the criteria for redundancies. For example, supreme court judgment 13/2014 annulled the dismissal of a worker as the company did not take into account the social and other criteria when choosing whom to dismiss. In particular, the employee had 15 years of service, was married with three minor children, and was replaced by a younger worker with fewer years of service and no family responsibilities. Therefore, according to the court, the dismissal was not based on objective criteria and was thus void, being manifestly and excessively contrary to good faith and the social and economic purpose of the employer's right to terminate the employment contract.

This regulation applies to all redundancy situations, individual and collective. At unionised employers, selection for redundancy can be agreed via the trade union(s). This is not a legal requirement but selection can be facilitated through trade union involvement. Works councils are not as prevalent as union involvement. Theoretically works councils could be involved. 

No information available.

No information available.

No information available.

Case law argues that the employer is responsible for his/her business and thus free to decide on restructuring measures leading to job cuts, as long as these actions are not a result of a culpably thoughtless manner and he/she is not using restructuring merely as a pretext for firing staff. Consequently, the employer is not required to justify why he/she has chosen to dismiss an employee rather than another. However, although he/she is free to take this decision, any selection of employees must not be discriminatory.

Labour legislation and relating amendments are discussed at policy formulation stage, in the tripartite Employment Relations Board (ERB). Members forming this board come from trade unions, employers' associations and the government.

Employer organisation VNO-NCW stated that in improving dismissal regulation, it is important to look for opportunities to offer employers the option to deviate from the last-in-first-out principle. The organisation would prefer the condition if the selection of employees to be dismissed could increasingly take place on the basis of quality. 

In addition, rules regarding which employees are to be made redundant may be contained in collective agreements. For example, pursuant to the collective agreement between the NHO (Confederation of Norwegian Business and Industry) and the LO (the Norwegian Federation of Trade Unions), length of service is the main criterion in relation to redundancies involving unionised employees. However, the length of service criterion can be deviated from if the reason is objectively justified.

For more information on collective dismissal see ‘[definition of collective dismissal](//www.eurofound.europa.eu/observatories/emcc/erm/legislation/portugal-definition-of-collective-dismissal)'.

Collective agreements are bargained with the representative trade union or, if there is no such trade union, with the representatives directly elected by the workers. These often include social criteria for selection of employees in the event of a collective dismissal, such as: * if the measure could affect two spouses working in the same enterprise, the lower-income spouse will be dismissed with priority. This order of preference cannot lead to firing a person whose position would not have been targeted by the dismissal; * the measure should be addressed, first of all, to those persons who do not have children in their care; * the measure should only lastly affect women who have children in their care, widowers, divorced men having children in their care, those who are the sole providers for their family, as well as those employees, both men and women, who still have three more years to work, at the most, before retirement. However, the statutory priority criteria (namely competence, based on the employee performance assessment) take precedence over criteria agreed through collective agreements. Collective agreements cannot deviate from the statutory criteria. The labour courts have acknowledged that the use of selection criteria is not necessary if the department is dissolved entirely. If the entire department is dissolved, the dismissal is valid even if no selection procedure has been followed, because in this case the employer has nothing to select. As a result, the use of selection criteria is only necessary in cases where some of the employees are kept on staff. If all employees of a department are dismissed, the dismissals are valid even if the employees affected have not been subject to a performance assessment.

No information available.

The regulation aims to ensure effective exercise of employees’ representatives rights by establishing that they will be the ‘last out’ in collective redundancies. As a result of this provision, regulation expects that employees’ representatives will have more freedom to protect worker’s rights in case of dismissals. This provision has not been questioned or discussed.

If there is a collective agreement in place, the parties are allowed to stipulate other criteria than in the Employment protection act. Most importantly, upon the announcement of the dismissals, further derogations may be agreed upon by the employer and the local union. As the employer often wants to dismiss employees by other criteria than in law or collective agreement and the unions are free to agree on any (non-discriminatory) alternative selections, this provides the unions with a very strong negotiating lever. This may, for example, secure compensation for older dismissed workers. If there is no collective agreement at the affected workplace, the employer must act in accordance with the order of priority rules as stipulated in the Employment protection act.  Employer organisations have long wished to see the Act reformed to allow for more flexibility, which is opposed by trade unions. As a result of a compromise with the Centre Party and the Liberals, the government tasked social partners to present a joint suggestion for amending the law. The social partners negotiated and (with the exception of the Swedish Trade Union Confederation) reached an agreement in the autumn of 2020 (available [here](https://www.svensktnaringsliv.se/sakomraden/arbetsratt/overenskommelse-om-trygghet-omstallning-och-anstallningsskydd-pa_1165707.html)), which is currently in the process of being redrafted into a legislative proposal by the government. One of the key principles in the Employment protection act is the 'last-in-first-out' rule, whereby companies needing to restructure / lay off staff have to consider the employment tenure, meaning that the last one to be hired should be the first one to be laid off. Under the new law, 'last-in-first-out' will still be the guiding principle in the event of a shortage of work. However, if the parties cannot agree on an order of precedence, the employer may by law exempt three employees from the right to continued employment. An employer who is bound by the main agreement may instead exclude three blue-collar workers and three white-collar workers per operating unit, or 15% of the blue and white-collar workers whose employment may be terminated. However, the exemption may not exceed 10% of the workers at the operating unit. Employers with only one operating unit covered by the agreement can instead choose to exclude a total of 4 employees. Another significant change in the new proposals is that, in the case of disputes over unfair dismissals, the employer would not always have to pay the salary of the affected employee until the issue is resolved, as is the case today. It would also become more difficult in general for employers to dismiss employees for ‘personal’ reasons, and there would be greater opportunities for employers to get funds for adjustment and skills support for staff, even when they are not covered by collective agreements. The law was passed through the parliament and the amended act entered into force on 30 June 2022, and the specific amendment regarding the last-in-first-out principle entered into force on 1 October 2022.